Don’t let an employment relationship turn in to a horror story

One of the most dangerous and costly mistakes an employer can make is to overlook written employment agreements. Whenever I discuss this topic with my clients, they often tell me that they do not see the necessity in spending time and money developing a legal document to clarify the employment relationship. They trust their employees, and according to them, each party has a clear understanding of what is expected of the other.

Unfortunately, the truth is that relationships change, and they can change for the worst. Getting written employment contracts in place with your employees may save you a lot of time, money and stress should things within the employment relationship turn sour. Here are a couple of scenarios that highlight just how wrong it can go:

Horror story #1 – Grounds for Termination – do you have any?

Bob has had his employment terminated. He decides to go to the Fair Work Commission to sue his employer for unfair dismissal. The employer argued that they had complied with the correct termination provisions. However, there was no written employment contract and therefore no detailed termination process or circumstances providing for serious misconduct.

Because there was not a clear statement or clause in the employment contract dealing with the termination process, the client was required to outlay funds for defence proceedings. That would have been avoided if details of a termination process was contained within a written contract of employment.

Lesson: Your contracts of employment should always contain detailed termination provisions and specify the circumstances that can constitute serious misconduct.

Horror story #2 – Pack up your desk but leave our clients!

Gertrude’s former employee is now working for one of Gertrude’s direct competitors. Gertrude discovers that this ex-employee is providing confidential information to the competitor to target Gertrude’s client base. She did have a written employment contract with the former employee, however the contract did not contain a restraint of trade clause. A restraint of trade clause provides an employer with a greater ability to restrict the employee’s activities and enforce any breaches of confidential information.

As this clause was missing from the contract, Gertrude cannot enforce her rights contractually, and will be required to rely on implied duties of the employment relationship. Arguing implied duties at Court makes proceedings difficult, lengthy, and costly.

Lesson: It is essential for your contract of employment to contain a detailed restraint of trade clause. Without one, there are no formal restraints placed on an ex-employee restricting them sharing your confidential information with another competitor.

How we can help

While verbal agreements are protected by the law in part, they leave a lot of gaping holes that make both the employer and employee vulnerable. The only way to have control over a wide variety of circumstances of the employment relationship (and to avoid your own horror story) is to create a formal, written agreement.

If you need help drafting or revising employment documents, we would be happy to help you. Feel free to call our office on 07 5428 1111.

Australian Financial Services licences and ASIC: More hoops to jump through during application process

The Australian Securities and Investment Commission (ASIC) regulates consumer protection within the financial sector. One of the ways in which they seek to protect consumers is in their role as a licensing body for the Financial Services industry.

In response to previous concerns, ASIC has recently become more vigilant in how they issue licences in order to strengthen their consumer protection functions. More in-depth inquiries in to products have been reported in 2015, with the Commission imposing a more strenuous questioning process on licence applicants.

This new, stronger, approach comes in reaction to a growing discontent regarding ASICs effectiveness and performance in previous years.

Who needs an AFS Licence?

An Australian Financial Services (AFS) Licence is required to carry out the business of providing financial services. Financial service is broadly defined, and includes services that:

While ASIC is required to grant an AFS licence whenever all the relevant criteria are met, it appears that the Commission is now taking a more proactive approach to the licensing process. They are now requiring more detailed information regarding potential Licensees and their businesses before an applicant will be successful.

As such, entities looking to obtain an AFS licence in 2015 will likely be required to undergo a more rigorous process than those in the past. It is more important than ever for entities to be fully prepared before lodging an application, otherwise they should prepare to face a lengthy application process filled with requests for further information from ASIC.

What you need before you can apply

In order to successfully apply for an AFS licence, entities must be able to provide information relating to an array of areas, including:

evidence that they are properly established;

the appropriate type of financial service or product, including class of product;

an appropriate description of the business including the types of business activities;

organisational competence;

compliance arrangements;

the ability to make representations, including the businesses ability to comply with the licence conditions and the adequacy of resources;

provision of adequate dispute resolution systems; and

provision of risk management processes.

Overall businesses must be able to provide core proofs, that is a range of documents evidencing and fully supporting the assertions made within their applications.

How we can help

If you are applying for an ASF licence, setting up a business for the first time, or need assistance dealing with ASIC, get in touch with one of the experienced solicitors at Streten Masons Lawyers. We provide a range of services to business owners, including:

Why terms and conditions matter

Some businesses operate through the predominate use of verbal agreements with their customers. This is generally appropriate in small day to day matters (such as buying milk at the local corner store) however when a substantial amount of work or goods are to be provided, it is imperative that everything is in writing.

Terms and conditions should contain the salient points relevant to the goods and services you provide. This includes:

The above are just a few examples of the many important terms that should be covered in a Terms and Conditions document. These become crucial when a customer fails to pay an invoice or is dissatisfied with the goods/services provided, and the business owner needs to limit their liability or recover the debt.

A personal guarantee creates a second recourse against a customer in the event of default in payment. A guarantee is typically signed by a company director in the case of a company transaction, or another associated person. This makes the guarantor liable to pay for any unpaid monies owed by the customer.

Including disclaimers and warranties can also limit your liability for the goods or services supplied, as well as retention of title clauses, and security interest registration. Including retention of titles provisions and creating registered security interests ensures that any property intended to be sold by you remains yours until the final invoice is paid by the buyer, or until all monies owing are paid in the case of a loan. If there is a default in payment, you will be entitled to exercise certain rights over the property, such as requiring the goods to be returned. In the case of a company falling into liquidation before paying for the goods, security interest registration can ensure that the goods are not sold off as assets by the company.

Enforcing your rights becomes a much simpler and easier task when they have been reduced in writing, as it removes the ‘he said –she said’ side of a dispute. All parties are completely aware of their rights and obligations from the beginning of the matter and the potential for having to go through the process of a formal dispute is minimised.

How we can help

At Streten Mason Lawyers, we help business owners create airtight terms and conditions. We can draft Terms & Conditions documents for your business from scratch, or review and update your current document. Make sure you are properly covered and contact us.

Getting to work after a licence is disqualified: Work licences and special hardship orders

A real issue that you may have to face should your driver’s licence ever be disqualified, is not being able to get to and from work. In this case many people walk, carpool, or use public transport instead, but what can you do if none of those are viable options?

Failing to hold a licence for an extended period of time could significantly impact the running and profitability of your business. You may have to place full reliance on another staff or family member to ensure that you are able to meet your day to day work commitments.

Work Licences

If you have been convicted of drink driving or another similar offence, then you may be eligible to apply for a Work Licence.

This is a licence which, when granted by the court, allows you to drive to and from your work place in order to maintain your livelihood. The licence replaces standard a Queensland driver’s licence, and is likely to come with time and locality restrictions. If you are successful in obtaining a Work Licence, the suspension period is typically doubled. It is important to note that this application must be made at the time that you plead guilty to the relevant offence.

To be eligible to obtain Work Licence you must meet all of the following criteria:

You must please guilty to the offence in question.

You must hold a current Queensland open licence at the time of the offence and hold the same licence at the time of application. A provisional or learns licence is insufficient.

You must not be driving for work purposes at the time of the offence, or already be under a Work Licence. This can even include driving to a work-related function.

You must not have been convicted of a drink driving offence (or an offence of a similar nature), or a dangerous driving offence within the last five years.

You must not have held a suspended or disqualified licence within the last five years.

Your blood alcohol concentration must be within the low to medium range, which means it must be below 0.15.

In additional to proving your eligibility, you are then required to prove to the court that you are a fit and proper person to hold a licence, and that failure to hold the licence will cause significant financial hardship to yourself or your family.

You are also required to submit an affidavit essentially showing that you will lose your livlihood without your licence.

It is important to note that failing to provide a breathe specimen when operating a vehicle with automatically deem you to fall within the high range limit and prohibits you from applying for a Work Licence.

Special Hardship Orders

A Special Hardship Order is an order granted by the court which restricts how you can drive. This might mean that you have restrictions placed on the times of day/night that you are allowed to drive. Again, most people apply for these in order to get to and from work.

To be eligible for a Special Hardship Order you must:

be losing your licence due to an accumulation of demerit points during a good behaviour period, or have been convicted of driving more than 40km per hour over the speed limit;

have no suspensions, cancellations or disqualifications within the last 5 years;

hold a current licence at the time of the offence; and

must not have been convicted of a dangerous driving offence within the last 5 years.

You must then prove that you will suffer extreme financial or other unusual hardship as a result of failing to hold a licence. This application differs to a Work Licence in that you must make an application to the court within 21 days of the suspension being imposed. Again, an affidavit is required when making your application to show the hardship you will suffer

If you think that you may be unlikely to show that you are a fit and proper person to hold a licence, driver awareness courses are often a good idea to undertake to show the court that you understand the seriousness of holding a licence.

How we can help

At Streten Masons Lawyers we can assist in making the appropriate application for you to ensure that your business and work life are not significantly impacted.

One of our senior solicitors, Mr Michael Mason, has over 30 years’ experience in the field and specialises in the area of criminal law.

Please contact us if you are in a situation that may qualify you for a Work Licence of Special Hardship Order to arrange a consultation.

Reforms were introduced last month to the processes of the Queensland Building & Construction Commission (QBCC). The aim of the reforms is to reduce administrative processes for licensees wishing to resolve a building dispute.

As we detailed in a blog article published last month, amendments to the Building and Construction Industry Payments Act have significantly changed the process of resolving payment disputes by streamlining it through the QBCC, producing a simpler, fairer system for adjudication.

Other notable reforms to the QBCC process that are relevant to the building and construction industry are detailed below.

Cutting red tape

Changes include mandatory mediation to be undertaken by disputing parties before the dispute can be heard at the Queensland Civil and Administrative Tribunal (QCAT).

The QBCC will also be implementing a new Early Dispute Resolution (EDR) system, which was trialled last year and is also expected to reduce the amount of dispute coming before the Tribunal.

Investigative and disciplinary powers of the QBCC

The reforms see greater investigative powers for building inspectors, who will be able to request certain identification documents to obtain details such as date of birth. The QBCC explains that this will allow for better evidence-gathering for offences such as unlicensed contracting, and breaches of financial requirements.

Disciplinary proceedings regarding electricians, pool safety inspectors, plumbers and drainers will also be managed through the QBCC to avoid the lengthier and costly QCAT process.

The QBCC has been granted additional power in taking disciplinary action against head contractors who fail or have repeatedly failed to pay their sub-contractors.

In instances where damage is caused to a property, contractors may also be directed by the QBCC to rectify damage incurred by neighbouring properties.

Changes to the review process

A free internal review system is now also offered through the QBCC for decisions that are deemed ‘reviewable’, reducing the amount of matters required to be brought before the QCAT and cutting costs for the parties involved.

The internal system can be used for decisions concerning licensing, rectification orders, compliance issues, certification investigations, or insurance claims. Decisions pertaining to an infringement notice which has been issued are not eligible to be dealt with internally.

There is a 28-day timeframe within which somebody may apply for an internal review after receiving the initial decision from the QBCC.

Anyone dissatisfied with the result of a decision may apply for the free review, however they are not barred from later applying for the more involved review service run through QCAT.

If you wish to have your claim reviewed by the QBCC or QCAT, it is advised that you seek legal guidance to ensure that the process runs smoothly.

How we can help

If you need assistance with a building and construction dispute, contact us to find out how we can help you get the best possible result with the least possible stress.

Have you set your business up correctly? Trademarks and Trading Names

Starting a new business for the first time can be a daunting and confusing process, as some of the concepts and terminology will be entirely new. Some new business owners are not aware at the outset that a company is actually distinct from a business.

Here are some important things to know when starting a new business:

What is the difference between an ACN, ABN and a Business Name?

An ACN is an Australian Company Number and is the designation given to a company by the Australian Security and Investments Commission (ASIC). This number is provided to you at the time of incorporation and unlike the name of the company, it will never change.

An ABN is an Australian Business Number. Any entity that will be collecting GST, whether it is a person or a company, will need to apply for an ABN before they begin trading. This applies particularly if they do not want to have to wait for their tax return to recoup the tax withheld on payments made to your business which could be up to 47%.

Business names, or trading names, may be registered to an entity and are allocated a reference code typically beginning with ‘BN’. It is important to make sure that you have registered your business name in order to ensure that no other entity can do so.

Is your trading name registered?

If you are trading or operating your business under a different name to your legal entity then you will need to register your business name. For example, if John Smith was operating a business under the name “John’s Quality Shoes”, then the business name “John’s Quality Shoes” would need to be registered to John Smith’s ABN.

Business names can be transferred between entities, which is what will happen if you sell your business to another entity. This process is done online using the ASIC website, so you will need to hold onto your ASIC key so that you can log in.

What is a trademark?

A trade mark is an image, colour, word, sound, or smell that is distinct to the goods and services that you as a business provide. Two examples might be the Cadbury purple or the Nike tick logo. Once a trademark has been registered, your business will be afforded significant legal protection in respect to that trademark.

There are, however, strict requirements regarding what will be allowable as a trademark. You will need to ensure that your trade mark application meets these requirements before lodging.

How we can help

If you need assistance in setting up a business, registering a trademark, or need advice on the legal aspects of running a business, do not hesitate to contact our office.

Franchising Code of Conduct Amended in January 2015

On 1 January 2015, the existing Franchising Code of Conduct was repealed with the Competition and Consumer (Industry Codes – Franchising) Regulation 2014 (new Franchising Code of Conduct) being implemented. The new Franchising Code of Conduct will govern Franchisors’ conduct and obligations from 1 January 2015 onwards.

The new Code will apply to existing Franchise Agreements that were entered into, on, or after 1 October 1998 that are renewed, varied or transferred on or after 1 January 2015.

Franchising Code of Conduct

The Franchising Code of Conduct is a mandatory legislative instrument that governs the relationship between Franchisees and Franchisors, and provides for information that must be disclosed to Franchisees when entering into a Franchise Agreement.

Amendments

The amendments have been introduced with the view of providing greater transparency to Franchisees in relation to the financial and legal risks and expectations of entering into a Franchise.

The following requirements will be implemented as part of the new Franchising Code of Conduct:

Parties to the Franchising Agreement are required to expressly act in good faith in their dealings with each other;

financial penalties of up to $51,000 have been introduced, and can be levied against Franchisors for major breaches of the Franchising Code of Conduct;

infringement notices for minor breaches of the Franchising Code of Conduct have been introduced;

franchisors are required to provide a short information statement to prospective Franchisees which outlines the risks and benefits of a Franchising relationship;

franchisors must provide greater transparency in their accounting of marketing and advertising promotion funds;

franchisors must establish a separate account for utilising marketing and advertising contributions provided by Franchisees;

for multi-tiered systems, Master Franchisors are only required to provide Disclosure to prospective Franchisees;

franchisors must provide disclosure on the ability of the Franchisee to sell and trade online; and

The new requirements and obligations that have been implemented are extensive, and it is important for Franchisees and Franchisors to understand their new rights and responsibilities.

All franchisors should review and understand the new Franchising Code of Conduct to ensure that the new requirements and mandatory disclosure obligations are complied with.

Penalties

The most significant changes are the imposition of financial penalties of up to $51,000 for incidences of major breaches of the provisions of the Franchising Code of Conduct.

Where the following areas are breached by Franchisors, penalties may be enforced and will be levied by way of a penalty unit system dependant on the seriousness of the breach:

Failing to act on good faith;

failing to provide a Disclosure Document or maintain a Disclosure Document in the form prescribed;

failing to provide a copy of a Lease or other agreements required by the Code;

failing to provide financial statements;

failing to disclose materially relevant facts;

failing to indicate the Franchisor’s intention to renew a Franchisee within the required timeframes and failing to provide a Disclosure Documents when providing notice;

failing to repay monies to Franchisees who have terminated within the cooling off period;

failing to disclose details of former franchisees or failing to remove a franchisee from the list of former franchisees;

restricting or deterring franchisees from freedom of association; and

failing to attend mediation.

Deed of Variation

The Australian Competition and Consumer Commission (ACCC) have drafted a Deed of Variation that can be executed by the parties to existing Franchising Agreements agreeing to be bound by the provisions of the new Franchising Code of Conduct.

It is necessary to carefully review your Franchise Documents prior to considering whether to enter into the Deed of Variation, as updated Disclosure Statements may need to be provided to Franchisees.

How We Can Help

It is strongly recommended that

franchisors have their existing Franchise Agreements and Disclosure Documents reviewed to ensure that they are compliant with the new Franchising Code of Conduct; and

prospective franchise purchasers obtain independent legal advice on the financial and legal obligations of the Franchise so that they properly understand the relationship being entered into with the Franchisor.

If you require assistance with any of the above matters, or a different area of commercial law, do not hesitate to contact our office.

The nuts and bolts of conveyancing

Conveyancing is a term used to describe the process by which the ownership of a property is transferred from a person to another person. It is a process that, while complex, can be streamlined by lawyers who have experience and an effective understanding of the law.

Conveyancing in Queensland is different to most other states in Australia. Most of the difference lies in different local Council areas and their requirements for the transfer. While no two conveyances are the same, the process of conveyancing in Queensland is generally as follows:

The buyer and the seller sign a contract for the sale of land usually including all of the improvements (such as buildings) on the land.

The parties each appoint a separate lawyer to handle the conveyancing process.

The lawyer reviews the contract and explains to their client their obligations and rights after signing the contract, and explains what must be done by the client in order to ensure that the party can ‘settle’ the transfer of the property. The term settle refers to the time that the buyer actually pays the purchase price to the seller and the seller actually transfers the property to the buyer.

The lawyer drafts all of the required legal documents to give legal effect to the transfer of the property. The lawyer also ensures that the legal documents are signed, as necessary, by the parties to the transaction.

Ordinarily the lawyer acting for the buyer will also lodge a document known as a settlement notice on the title to the property. The purpose of this document is to prevent the seller from transferring the property to a third party behind the back of the buyer.

The lawyer also conducts searches through the numerous government and body corporate records to ensure that the property is as it appears and that there are no problems needing to be addressed according to the terms of the contract. It is important that you engage the right lawyer so that they can properly review these searches to ensure that your rights are protected.

The lawyer liaises with banks and other parties to ensure that everything and everyone is coordinated for the day of settlement.

On the day of settlement, each party’s lawyer attends the place of settlement and settles the transfer of the property.

Where required, the buyer’s lawyer will lodge any document required to be registered with the Government to record the transfer of ownership in the property.

This is a brief outline of the conveyancing process, which in reality can be much more complicated. There are a variety of different steps required to ensure that both the terms of the contract and the legislation governing the process are complied with properly.

How we can help

Allanah Perry, our Conveyancing Manager, has over 30 years’ experience in conveyancing and has a reputation for going above and beyond for her clients. Here is some feedback we received recently from one of our clients:

“Allanah and Karina were the people we dealt with, and we found them both to be extremely professional… They made the whole process of buying and selling totally stress free for us.”

If you are thinking of buying or selling a property and want to feel confident that you’re in good hands, please contact us or complete an online quote today to arrange a quote.

Building & Construction: BCIPA amendments now in effect

The Building and Construction Industry Payments Act 2004 (Qld) (BCIPA) has been long in the process of being amended. On 15 December 2014 the full amended provisions came into force. This means that the new provisions will apply to any contracts entered into after this date.

Blackout period and adjudication

A longer ‘black out‘ period has been established with the new reform. Business days now excludes all days between 22 December and 10 January each year. Payment claims served within this period will now be delayed for around three weeks.

There are also additional adjudication processes and requirements that have been inserted. The adjudication process is now administered by the Queensland Building and Construction Commission (QBCC).

Complex and Standard Claims

Payment claims have further been divided into two categories, Standard and Complex Claims. Standard Claims are claims for $750,000.00 (ex GST) or less, and Complex Claims are all other claims in excess of this amount. Standard claims require the standard 10 business day timeframe for service, whereas Complex Claims now have differing timeframes.

A Complex Claim served less than 90 days after the due date for payment requires 15 business days for service, where as if the 90 days from the due date has passed then 30 business days are required for service.

Further, in the event that a response is not received form the debtor within the timeframe required, then a second claim must then be served within 20 business days from the due date in the initial claim. The second claim will be required to give the debtor a further 5 business days to pay.

Time frames to commence

The timeframe for initial a payment claim on a debtor also has been shortened from 12 months to the later of the contracted timeframe or within 6 months after the construction work was last supplied. A final payment claim must also fall within the above time periods however also includes a period from 28 days after the end of the last defects liability period ( see Section 17A of the BCIPA).

Want more information?

Streten Masons Lawyers strive to keep the public updated with the most current news in changes to legislation. Early next month we are planning to hold a seminar for professionals in the Building & Construction industry. Anyone is welcome to come along to hear about the BCIPA changes in more detail and ask any questions you may have. If you would like to register your interest in this event, and receive ongoing updates regarding the BCIPA changes, fill your details out in the form below:

BCIPA Changes – Register Your Interest

First Name *

Last Name *

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If you need assistance in the building payment claim process, contact us for expert advice as to how your interest might best be served.